Blackgold debuts in the red

The year’s biggest listing,
Blackgold International Holdings
, had a forgettable debut on the Australian Securities Exchange, with the stock closing at its intra-day low of 24¢ on the final bell.

Blackgold listed at 26¢ at 1pm yesterday and soon hit 26.5¢. But support waned through the afternoon and it finished down 2¢ to 24¢.

The Chinese coalmining and coal trading company raised $70.2 million from local and offshore investors, selling 270 million shares at 26¢ each in the initial public offering. It has a market capitalisation of $230 million.

Melbourne-based boutique Peregrine Corporate led the capital raising. But the firm will not be given any Australian lead table credit for the float because the issuer was from China, Dealogic said.

“Investors took a bit of convincing; it doesn’t fit into the usual brokers box," Mr Revelins said.

“It’s something that people have taken a while to get their minds around but once they did we got some pretty committed institutional investors."

Blackgold’s Chinese owners listed on the ASX to improve credibility and develop its coal trading arm with Australian suppliers. The company owns and operates a productive coalmine in China, the Caotang Mine, and has entered into agreements to acquire the business and operating assets of the Heiwan Mine mine in China’s Chongqing province.

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The mines produce 700,000 tonnes of thermal coal a year, which is sold to seven local power stations. The production is small by Australian standards. It would be comparable to Cockatoo Coal’s flood-affected Baralaba coal mine in central Queensland which would produce around 600,000 tonnes per year at normal operating capacity.

Blackgold’s prospectus said the mines had operated profitably for the past three years. Pretax profit for the six months ended April 30, 2010, was $9.06 million.

The float is Australia’s biggest of 2011, according to Dealogic data. Octagonal Resources has been the only other float over $10 million.Larger floats, including CVC Asia Pacific’s Nine Entertainment, have been pencilled in for later in the year.

Mr Revelins said Blackgold approached his firm because of its success with Atlas Iron’s float back in 2004. It was Peregrine’s first float since the global financial crisis.

“If you have the right asset, the IPO market is fine," Mr Revelins said.

“And this is something is not something where people will have to wait five years to see if they get the feasibility study through. It’s producing and operating now and the idea is to scale up production and let the numbers do the talking."

Fees paid to the Peregrine were $678,950, according to Blackgold’s prospectus.

Perth firm Blakiston & Crabb did the legal work.

Ventnor Resources was also due to list on Tuesday but the float has been put back to Thursday. Ventnor offered investors 30 million shares at 20¢ each to raise up to $6 million.